AllianceBernstein fee income recovering as asset focus changes

* Bonds, alternative assets fuel firm's stock rebound

* CEO Kraus says company faces brighter future

Nov 13 (Reuters) - Most of the fees U.S. money manager
AllianceBernstein L.P. lost from a sharp reduction in
large-cap stock assets since the financial crisis have been
replaced, top executives at the company said on Tuesday.

With strong growth in bond and alternative assets and
allocation services, AllianceBernstein has replaced 75 percent
of the fees lost from an over-reliance on large-cap stocks,
Chief Executive Peter Kraus said. He made his remarks at a Bank
of America Merrill Lynch conference in New York.

The early stages of the turnaround have rejuvenated
AllianceBernstein's share price in recent months.

Since the end of July, AllianceBernstein's stock has surged
39 percent as clients pull significantly less money out of the
company's investment products. The stock was up 2.2 percent at
$16.79 in late trade on Tuesday trading, though still well below
the $60-range where it traded in 2008 before the financial
crisis imploded.

The company is controlled by French insurance giant Axa SA
, which in June extended Kraus's contract for another
five years.

During the onset of the financial crisis,
AllianceBernstein's assets under management were whipsawed as
institutional investors pulled money out of large-cap stocks,
which, including those of banks, accounted for $228 billion of
assets under management at the end of 2008.

That figure now stands at about $63 billion, and Kraus said
the company doesn't need to return to the large-cap levels of
2008. That's because bonds and other asset classes have emerged
as a growing force within the company's fee base.

Morningstar Inc analyst Greggory Warren said in a recent
research note that AllianceBernstein's long run of asset
outflows could reverse course as earlier as next year.